I recently learned about I-bonds in relation to TIPS. In short you can only own 10K of them, they’re linked to the CPI so you’re at least heavily hedging against inflation, and you can redeem them for mostly no loss at any time since no secondary market exists (thus contrasting with TIPS which are bonds that you can still run a loss on a secondary market).
- I know that in relation to Revolutionary War debt Jefferson wanted to have the initial principal value of bonds paid back to the person they were issued to while the accrued interest could accumulate to the current holder. This would be an attempt to uphold a secondary market while compensating original holders (many people were forced to sell real goods in return for debt to the continental army and then could only sell the debt for a massive discount), although this plan was deemed impractical and not adopted.
- I don’t know how widespread it was or if anyone actually invoked this by the 20s, but it was at least relatively common for contracts to be able to be settled in actual gold instead of dollars as late as the 1930s, which raised contractual/constitutional problems early on in FDR’s administration but the courts conveniently said it was okay to renege on it.
- Keynes’ proposal at Bretton Woods was interesting, and I always find it surprisingly un-Keynesian. His Bancor proposal would have, in theory, basically have made international currency manipulation impossible. It would kind of acted like a pseudo-gold standard but with built-in mechanisms to prevent currency sterilization like what happened in the 20s: https://en.wikipedia.org/wiki/Bancor
I guess a bonus fact I feel like throwing in there: One of the only smart things the US government did in relation to gold was to fix price at 1973 prices on its asset books after going off the gold standard. This is to say that on the books all gold USG holds is fixed at the 1973 price of like 40 bucks an ounce, less than 1% its actual current market value. As far as I know this really only serves one purpose: Making it look like the US can raise way less money than it actually can from selling off its gold assets. It’s still a drop in the bucket for current American national debt, but it’s a smart accounting trick for an irresponsible spender.
What are other interesting financial instruments/arrangements that you know about?